Factors that affect Premium rates of Motor Insurance

 

1] Car Usage – The more the car is on the road the higher the exposure to risk of accidents (3 General Categories: Private, Company & Commercial)

2] Make & Model – Provides indication of the performance, risk potential & market value

3] Car Engine Capacity – Higher performance cars attract higher premiums

4] Car Age – Reduced value of an older car may result in a lower premium

5] Driver Characteristics 

–> Age, Gender – Statistics have shown that young drivers have higher accident rates than more mature drivers

-> Driving experience – Inexperienced drivers may be more susceptible to meeting with accidents

-> Occupation – If the occupation requires the Insured to be on the road frequently, premiums may be higher

-> Claims experience – Drivers with good records are entitled to discounts on premiums

Extensions to Motor Insurance

 

Extensions are additional benefits available to the Insured under a Private Motor Car Insurance policy.

Here are 3 examples of Extensions:

Legal liability of Passengers

- This is liability incurred due to the negligent acts of pasengers, ie. a passenger opens the door of the vehicle without due care or proper look-out for passer-by, vehicle, cyclists.

Windscreen Damage

– The windscreen is already covered under the standard policy, but if a claim for such a damage is applied the NCD will be affected

- If this extension is purchased, damaged to windscreen will be treated as a separate issue and NCD will not be affected

No Claim Protector

- This extension allows motorists to make claims on their own Insurance policies without losing the entitlement to their NCD

- This extension is only valid for motorist who already have 50% NCD

ie. Motorist ‘A’ already has 50% NCD, if he meets with an accident the NCD on renewal will be reduced to 20%.

IF he purchased the extension, Motorist ‘A’ will be able to preserve his NCD of 50% even after an accident.

What to do in the event of a Motor Accident

 

1] Notify the Insurer as soon as possible, take note of:

- details of the accident, time & location

- circumstances leading to the accident

- third-party’s vehicle number, Insurance company, policy number, name & contact details of third-party

2] Forward all related documents to the Insurer (letters, summons..etc)

3] Advise the Insurer regarding knowledge of any impending prosecution, inquest or inquiry

4] Make a Police report if someone is injured

IF you have an Insurance Agent servicing you, just give him/her a call

No Claim Discount (NCD)

NCD is a financial incentive for the Insured, if he hasn’t made any claims under the Motor Insurance policy.

In Singapore, if there is no claim made during a period of Insurance immediately before the renewal of a policy, a NCD will be granted on the renewal premium.

The discount increases as the years increase.

NCD is transferable from one Insurer to another

What is Excess? (Motor Insurance)

 

The term “Excess” in Motor Insurance relates to the 1st part of any claim that the Insurer will not pay. This amount has to be paid by the Insured.

“Excess” may be removed/reduced if the Insured proposes to pay a higher premium.

Reasons for “Excess”:

- Making the Insured liable for the excess payment, instills a greater sense of care on the part of the Insured

- Rather than terminating the policies of Insureds with bad claim experience, higher excess may be offered

Types of Private Motor Insurance Cover

 

In Singapore, private motor insurance applies only to the following areas:

- The Republic of Singapore

- West Malaysia

- Part of Thailand within 50 miles of the border between Thailand & West Malaysia

There are 4 general types of Motor Insurance:

1] Act Liability Only

- This is the only compulsory cover in Singapore

- Covers only death or bodily injury to third-parties (including passengers)

- This cover is usually not sold on its own

2] Third-Party Only

- Covers death or bodily injuries to third-parties and/or passengers, and also covers damage to property belonging to third-parties

3] Third-Party, Fire & Theft

- Covers death or bodily injuries to third-parties and/or passengers, and also covers damage to property belonging to third-parties

- Plus covers loss or damage resulting directly from Fire and Theft Only

4] Comprehensive

- This cover has the widest protection, it covers the Insured’s liability for causing death/bodily injury or property damage to third-parties (including injury/death to passengers)

- Also covers damage to vehicle the Insured owns

- It can provide for reasonable medical expenses incurred arising from his own bodily injury and also Personal accident benefits

An examples of a Comprehensive plan is AIG Auto Plus.. 

AIG Auto Plus Brochure download:

http://www.aiggeneral.com.sg/Images/AutoPlus%20Brochure%200409_tcm440-66918.pdf

For more information, please drop me an email: mark.lim@aia.com.sg